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The Relationship between Labour Market Conditions and Welfare Receipt in Australia: A Stock-Flow Analysis

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Abstract

Understanding the determinants of changes in welfare caseloads is an important, but little studied, topic in Australia. This paper evaluates the role of labour market conditions in explaining the changes in the Australian welfare caseload since the late 1990s. The paper employs a stock-flow approach to better control for persistence in welfare receipt and includes different specifications to deal with measurement error in labour market data. The results suggest that the labour market is an important determinant of movements on and off welfare, accounting for the majority of the caseload decline during 1997–2005. The results also highlight the importance of robustness checks when data are measured with error.

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  • Ha Vu, 2014. "The Relationship between Labour Market Conditions and Welfare Receipt in Australia: A Stock-Flow Analysis," The Economic Record, The Economic Society of Australia, vol. 90(291), pages 507-525, December.
  • Handle: RePEc:bla:ecorec:v:90:y:2014:i:291:p:507-525
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    File URL: http://hdl.handle.net/10.1111/ecor.2014.90.issue-291
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    References listed on IDEAS

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    1. Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
    2. Cappellari, Lorenzo & Jenkins, Stephen P., 2008. "The Dynamics of Social Assistance Receipt: Measurement and Modelling Issues, with an Application to Britain," IZA Discussion Papers 3765, Institute for the Study of Labor (IZA).
    3. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
    4. Lixin Cai & Guyonne Kalb & Yi-Ping Tseng & Ha Vu, 2008. "The Effect of Financial Incentives on Labour Supply: Evidence for Lone Parents from Microsimulation and Quasi-Experimental Evaluation," Fiscal Studies, Institute for Fiscal Studies, vol. 29(2), pages 285-325, June.
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    More about this item

    JEL classification:

    • C59 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Other
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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